Georgia’s Tax Cuts and Revised Budget for 2026

ATLANTA — Georgia is set to benefit from approximately $2 billion in tax reductions following the General Assembly’s approval of a revised state budget for the fiscal year 2026. This budget now awaits the signature of Governor Brian Kemp.

In a statement on Wednesday, Kemp commended state lawmakers for their efforts.

“Today, significant legislative action was taken on my top priority of saving taxpayer dollars and investing in a safer, more prosperous Georgia,” he remarked.

Let’s dive into some budget highlights.

Tax Refunds and Property Tax Relief

During his State of the State address, Kemp expressed his intention to bring back income tax refunds for Georgians. Initially removed by the Georgia House of Representatives, a compromise was reached during negotiations, allowing it to be reinstated in the revised budget.

The tax refund, amounting to $1.2 billion, will remain unchanged, with individual taxpayers set to receive $250 and couples receiving $500.

“As I’ve mentioned before, it’s your money, not the government’s,” Kemp noted in his speech.

The budget also earmarks $850 million for the Homeowner Tax Relief Grant Program, aimed at assisting Georgia homeowners with their property taxes in 2026. Homeowners can expect to save around $500.

Moreover, alongside the budget approval, the Georgia House of Representatives passed House Bill 1001, which aims to reduce the state income tax rate from 5.19% to 4.99%. Lawmakers continue to look at additional income tax proposals.

Bonuses for School Faculty

The revised budget allocates $366 million in bonuses for public school employees in Georgia. K-12 teachers, as well as administrative staff, custodians, nutrition staff, school nurses, and bus drivers, will each receive a one-time bonus of $2,000.

Additionally, the Georgia Department of Early Care and Learning is set to distribute $17.2 million in bonuses of $2,000 each for teachers and teacher assistants.

Other Significant Allocations

• $2 billion transportation initiative
• $325 million to create Georgia Dreams, the state’s first need-based scholarship fund
• $12 million allocated for HOPE Scholarships
• $29.8 million for a new school of optometry at Georgia Southern University
• $150 million designated for the Georgia Department of Corrections to expand bed space
• $409 million for a new Georgia Regional Hospital in Atlanta to tackle mental health bed shortages
• $100 million contribution to the Georgia Employees Retirement System to aid state retirees